According to Ricardo, a Country Will Have a Comparative Advantage

question 41

Multiple Choice

According to Ricardo, a country will have a comparative advantage in the product in which its

• A) labor productivity is relatively low.
• B) labor productivity is relatively high.
• C) labor mobility is relatively low.
• D) labor mobility is relatively high.
• E) labor is outsourced to neighboring countries.

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Definitions:

Experience-curve Pricing

A pricing strategy based on the concept that unit production costs decline by a fixed percentage each time production experience doubles.

Cost-plus Pricing

A pricing strategy where a fixed percentage is added to the total cost of producing a product or service to determine its selling price.

Experience-curve Pricing

A pricing strategy that relies on reducing costs and setting prices based on gained efficiencies and experience over time.

Experience-curve Pricing

A pricing strategy that leverages reduced costs obtained through increased production experience to set lower prices aimed at gaining market share.